Microeconomics of the Ford Motor Company
Final Paper – ECO201 14EW1
Karen J. Cassady
Southern New Hampshire University
(Brief Summary of paper aprox 150 words) to be added for final draft.
The purpose of this paper will be to explain how the supply and demand as well as the elasticity of demand exists for the automobiles produced by the Ford Motor Company. The early history of the company through the present will be highlighted in an effort to show how the firm became a global leaders in the production of automobiles.
Ford Motor Company
The firm that I have chosen for this paper is the Ford Motor Company. The Ford Motor Company has become one of today’s largest most profitable companies in the auto industry and has been family run for over 100 years (“Ford Motor Company,” 2014). The Ford Motor Company is headquartered in Dearborn, Michigan which is a suburb of Detroit. In 1901 Henry Ford made his first attempt in the auto industry. He started a company known as the Henry Ford Company on November 3, 1901 which was later sold to the Cadillac Motor Company in 1902. Mr. Ford retained the rights to his name and was able to establish The Ford Motor Company with initial investment of cash from prospective stockholders in 1903. Ford has contributed many firsts to the auto industry with such things as the first engine with a removable cylinder head in 1908 to the introduction of the assembly line in 1913, as well as the first car with a windshield. In later years he also brought to the industry improved safety with the redesign of the steering wheel the addition of rear seatbelts, even child proof door locks (“Ford Motor Company,” 2014). The very heart of Ford Motor Company lay in Mr. Ford’s moving assembly line which he introduced at the Highland Park plant in 1913. This helped the company to far exceed the production capacity of its competitors while lowering the price of the finished product.(Historic Sites) By 1914, improvements to the assembly line process had reduced the amount of time needed to build a complete Model T to just 93 minutes (Corporate Ford Heritage, 2014). The roaring twenties saw many improvements and additions at Ford. By 1919 the Model T held 40% of the domestic market (“Ford Crises of 1920-1921,” 2007). Throughout the 30s and 40s, Ford continued to set the standard for the automotive industry. The company’s first new V-8 engine was debuted in 1932. (Ford Richmond Assembly Plant - Operation during the 1930s) In 1940, while Europe and Asia had gone to war and the United States still struggled with economic depression, the Richmond Branch produced about 100 cars each day. Soon this became a Mercury assembly plant, so five models of Mercury’s including sedans, coupes, and convertibles comprised about one-quarter of Richmond's output. Sales of Ford's 1941 models were among the best ever due largely to the demand created by WWII. (Ford Richmond Assembly Plant – Ford’s Conversion to War Production) The 50s and 60s saw Ford transition from a family owned company to one that would be publically traded. On January 18, 1956, when the Ford Foundation began to sell its stock in the company. The price was $64.50 per share. (Stock Tools & Information) The 70s and 80s were difficult times for the once mighty company. After setting a U.S. sales record in 1978, Ford saw its volume plunge more than 45 percent in the next three years. Its market share dropped from 25.5 percent to 19.7 percent in the same span. The losses came large and quick: $1.5 billion in 1980, another $1 billion in 1981, and $658 million the next year. Americans eager for quality and fuel economy lined up for Japanese imports before the cars left the ship (From red ink to glory: The '80s story). The mounting losses in sales revenue caused a different kind of loss: The loss of executive talent. Many of Ford’s top managers left the company to head a new Nissan venture in Tennessee while...
References: Ford Motor Company. (2014, September 14). In Wikipedia, The Free Encyclopedia. Retrieved 20:58, September 17, 2014, from http://en.wikipedia.org/w/index.php?title=Ford_Motor_Company&oldid=625517351
Historic Sites (2014). The Moving Assembly Line debuted at the Highland Park Plant.
Retrieved from http://corporate.ford.com/our-company/heritage/historic-sites-news-detail/663-highlandpark
Ford Crises of 1920-1921. (2007). Retrieved September 17, 2014, from
Ford Richmond Assembly Plant-Operation during the 1930’s. Retrieved September 17, 2014 from
Ford Richmond Assembly Plant-Ford’s Conversion to War Production. Retrieved September 17, 2014 from https://fordmotorhistory.com/factories/richmond/war_production.php
Stock Tools & Information- Stock, Splits, and Spinoffs. Retrieved September 17, 2014 from
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